All right, kiddos! It’s time for Part II of the conversation begun last week about estate planning for millennials, wherein we find a lighthearted way to talk about money and death. There should be a Schoolhouse Rock! cartoon on the subject. Unfortunately the show went off the air before it could find a catchy way to address the importance of bequeathing your earthly possessions and making provision for your dependents and heirs, so we’ll have to make do the best we can. Let’s start at the top.
WHERE THERE’S A WILL, THERE’S A WAY: What is a will exactly? Is it different from a Living Will? Is there such a thing as an Unliving, Unleavened, or Zombie Will? Do we still “entail” things, like they do on “Downton Abbey“? What if we’ve got nothing to leave but debt and a questionable browser history?
The Los Angeles Review of Books has a really interesting interview with Andrew Ross, the author of Creditocracy, which examines debt in the U.S. and our “predatory debt-money system that only benefits the 1%.”
At The Root, Demetria Lucas writes about a phenomenon that is happening among young adults: “fronting,” or running up deep debts to project the professional success they aim to achieve (“fake it till you make it,” “dress for the job you want,” etc. etc.). Lucas tells the story of a friend who wanted to launch himself as a nightlife entrepreneur.
In case you needed a new way to go into debt, Marketplace has a story about employees taking out loans or cash advances from their employers:
Let’s say someone has a car that breaks down. Gotta get it fixed, right? But what if this person doesn’t have the money?
“Unfortunately, many of our consumers don’t have access to traditional bank credit,” says Ken Rees, CEO of Think Finance, a workplace lender out of Fort Worth. A lot of his “consumers” are restaurants workers, hotel staff, even teachers and nurses. And he says a lot of times, they can’t get emergency credit.
“It’s the choice between this product and a payday loan or this product and no access to credit at all,” he says.
That product he’s talking about is called Elastic. It lets employees borrow money through their employer. At Think Finance, a worker can get a line of credit, up to $1,000. There’s a 5 percent fee for cash advances. Plus, other fees for higher loans–the bigger the loan, the higher the fees.
“They can get onto the website. We’re able to ping that payroll system, know that they’ve been paid a certain amount, know that they are who they say who they say they are, and then we’re able to feel confident giving that customer the credit that they need,” Rees says.
How much credit depends on things like how long a person has been with a company, and credit history. Employees can repay the loans by check or in cash, but usually these loans are repaid directly from a paycheck.
What are the interest rates on these loans? One company that handles these types of loans, FairLoan, says “they’re meant to be affordable, with interest rates starting at 18 percent,” which—do they know what “affordable” means?
If I needed emergency money, I would look for it anywhere besides an employer—having that debt at your place of work sounds like bad news.
Photo: Phil Whitehouse
Karen Weise at Businessweek breaks down a proposal from a group of “student-aid advocacy and research organizations” whose aims are to simplify student loan repayment. The plan includes “auto-IBR,” or automatically enrolling all federal student loan borrowers in a repayment plan based on income, and then collecting payments through an employer withholding system. Whoa now.
Hannah Rappleye and Lisa Riordan Seville cover the disturbing and arguably unconstitutional practice of private probation for The Nation. And there are many more troubling anecdotes where that one came from (namely, a small town in Alabama called Harperville).
Elisabeth Rosenthal, who has been writing a series on the cost of health care in the U.S., wrote a piece in the Times Sunday Review this weekend looking at how chaotic medical billing can affect our credit.
The Federal Reserve of New York released some numbers last week that show — surprise! — student loan debt is higher than ever. Sam Frizell at Time talks about how student loans aren’t just bad for our own personal economies, they’re bad for THE economy.